The current release version 1.1.5 of Mongrel is incompatible with Ruby 1.9 and throws this error when it is run. It's easy to solve - just make sure Rubygems is up-to-date:
gem update --system
Then install the new pre-release version of Mongrel:
gem install mongrel --pre
Alternatively, if this isn't caused by Mongrel, you can try installing the DevKit, then try this:
gem install *gemname* --platform=ruby
This forces compilation of the extension from source using DevKit and works with most of the major gems I've tried.
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